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The U.S. dollar slipped to its weakest level in more than four years against the euro, as traders doubled down on bets the Fed will cut rates this week. With markets pricing in at least a 25-basis-point trim, maybe more, the greenback is losing altitude, giving global currencies like the euro and yen room to rally. Treasury yields are also falling, reinforcing the dovish tone heading into the September 16–17 Fed meeting.

The drop underscores how much confidence investors have in the easing cycle finally beginning. But it also raises tricky questions: how far can the dollar fall before it sparks inflationary pressure through pricier imports? And how aggressively can the Fed ease without fueling volatility across global currency markets? For now, the dollar’s slump is the clearest sign that traders see this week’s Fed move not as a one-off, but the start of a broader pivot in U.S. monetary policy.